How your favourite local coffee shop is driving house prices
MELBURNIANS’ desire to find good coffee hangouts is rubbing off on property prices.
A report has highlighted what homebuyers were prepared to pay to enjoy Melbourne’s village lifestyle.
The Economy of Shopping Small Report, commissioned by American Express, has shown homebuyers were willing to spend almost $30,500 more to live close to a shopping village.
The average increase in the median price for homes close to shopping villages in Melbourne was $178 per small business, the report found.
Suburbs with double the number of small businesses had a 10 per cent higher median price, when compared with suburbs with a similar population density and distance to the CBD.
WBP Property chief executive Greville Pabst said homes closer to shopping villages had better capital growth because they were also closer to train stations, tram and bus stops.
“There’s a strong correlation between the lifestyle of the village, the coffee, and property values,” Mr Pabst said.
“It’s the transport, being close to a beachside village, or a trendy restaurant, a cafe or a quirky bookshop,” he said.
“It’s those lifestyle attributes that people desire — like to be able to go down and read the paper and have breakfast — that is really important for people when they’re buying property.”
Mr Pabst said the best homes were off the strip, still within walking distance but not affected by traffic noise or from venues such as pubs.
He lists popular villages like Ormond Rd, Elwood; Greville St, Prahran and Anderson St, Yarraville. While some were big, like Glenferrie Rd, Hawthorn or Sydney Rd, Brunswick, Mr Pabst said others were small, like Rathdowne St, Carlton.
Rob Elsom, who is director of Hocking Stuart offices across Melbourne’s northern city fringe, said buyers paid a 10 to 15 per cent premium for homes close to strips like Westgarth village, on High St, Northcote, where the median price was $990,000, according to CoreLogic RP Data.
Mr Elsom said new residents and new businesses were helping the villages evolve.
“Footscray is a good example. It’s slowly evolving,” he said.
“You drive around Footscray and see little holes in the walls with a bespoke coffee shop with four chairs out the front and that’s where it all starts. Next thing one of the big-name chefs opens a bar there and it’s changing and off we go.”
Mr Elsom said there were some emerging villages to keep an eye on.
“Near Miller St, Thornbury. One side of the street is Thornbury, on the other side it’s Preston. There’s a primary school nearby, the shopping strip and a tram runs straight through. Anywhere near there is going to be red hot in two years’ time,” he said.
Mr Elsom said Buckley St, Footscray was worth a look.
“My advice is to be literally 250m away from that main strip,” he said.
“Make sure you buy a period home, because you generally find that 80 per cent of buyers are looking for a period home.
“Park yourself in it, get a feeling for the area and do a renovation because in five years’ time you’ll thank your lucky stars that you did.”
Westpac general manager of small and medium enterprises, Julie Rynski said the benefits small businesses delivered were far reaching.
“Whether it’s providing personal service, diversity of products that are unique, or adding value to suburb profiles and property prices, they are contributing to the fabric of our local communities,” she said.